money

Life Insurance for my kids? Let’s gadgetize things up

Gadgetize Insurance

My concern about money grows when I read How Much Life Insurance Do You Need?. I was a selfish guy who thought about himself a lot and I hadn’t been seeing other person’s problem as an issue. Even at some point I had thought when I got married and had kids, I would never care about them anymore after I was dead — it’s their problem for having money or not, I’m dead already.

6 years of being dad, and they have been wonderful years – moments of tears, moments of joy, moments of adventurous and rebellious.Then  I started to have tears, thinking about what would they eats,  a place to stay, and how can they survive in a world of ever-changing faces of technological expansions. Hmm, I do care about people.

Also, consider how long your partner will have to support your children after you are gone. You can get coverage that will allow your youngest child to reach age 18. So, if your youngest is a baby, you might decide to get a 20-year term life policy (a little extra wiggle room). Then, you can add up what you hope to pay off with a life insurance policy. Your list might look something like this:

* $185,000 mortgage
* $7,000 car loan
* $20,000 student loans
* $6,000 credit cards
* 18 years x $45,000 = $810,000
* $5,000 funeral cost

-Miranda Marquit

I have been thinking that all kids’ knowledge and education will be much more advanced. So, if  I were gone gone before they go to university, I want my kids live up to that currents. I add up one item for spending gadget because I believe in technology that will set them apart from others — in terms of creativity and productivity. So I setup my list that might look something like this:

  • RM130,000 Mortagage
  • RM 35,000 car loan
  • RM 7,000 PTPTN loan (student loans)
  • RM 5,000 credit cards
  • RM 2,000 funeral cost
  • 18 years x RM36000 = RM 648,000
  • Spending solely on gadget like Laptop, iPad, Tablet, Desktop PC for educational purpose, RM 2000 x 18 years = RM 36,000

Total sum is RM 863,000 worth of life insurance that I have to subscribe.

Dumb Ways to Spend Money on Your Kids

We love our kids. We love them above all. We spend our hard-earned money on them so they get equal opportunity like other kids do. But we don’t have spend our bling bling money over them, like there’s no tomorrow.

Some of us may disagree with me. “Yeah, why not. If we love them, we should give everything they want. If they want expensive toys, let them have it. We spend on our kids anyway, not on our next door kids.”

What if our spending habit takes its toll on our financial stability? 

Spending on expensive, branded items is against my policy. I, as a dad of two kids, didn’t argue that we should give them all especially toys. But so far, I manage to divert from buying expensive toys from Toy R’ S.

Well, not all toys. Sometimes, I feel a sympathy over them when they make cute little frown lips and watery-eye-is-about-to-spill tears.

 It’s a battle I should say. If I lose, I buy item expensive thing at branded outlets like Mickey or Toy R us. If I win, we travel 20 kilometers from our home to shopping second hand toys at Amcorp Mall.

As our kids grow older, they may get influenced by yummy advertising shown all over the internet, TV, or radio. They started to choose brand over quality. So they can show off to their group of friends. And we, parent — as always — go for the cheap ones.

But when two interests collide with each other. There will be one side that’s always lose. In order, to save our money from getting drained, and to teach them how to separate them from becoming brand/fashion victim, we must find solution.

Teach them how to choose. The notion of “going for alternative, cheaper brand” must always in their mind.

GoBankingRate suggested that:

How to say ‘no’: For young kids, a fun way to demonstrate that cheaper brands and name brands are often similar is a blind taste test. Ask kids to identify which is the brand name and which is the generic. Even if they’re correct in identifying the products, they’ll notice how similar they are.

There’s another way how to teach them: To be a role model to them. We should not buy our item base on fashion, but base on quality. I know it’s hard to let go of an LV handbag and buy Bonia handbag instead. But for our children sake. We should do that.

5 Dumb Ways to Spend Money on Your Kids [Bankrate via GoBankingRates]

photo by: Digital Sextant

Saving Is Investing


Photo: o5com

Well, many of us didn’t realize that saving is actually investing. For me, saving is just a sum of money that I feel the need to keep it, rather than use it. Regardless whether I put it under the pillow or in a bank.

I never see my saving is some sort of investment vehicle, until I read this argument, which is make sense to me.

The thing is, they’re overlooking the fact that they’re already investing that money. Simply having cash in a savings account is an investment! Investing simply means that you’re utilizing a resource that you own or control with the intent of having that resource provide additional gains to you (or to someone else). Loaning $20 to a friend who is very thankful and promises to pay you back is an investment. You’re utilizing a resource you own or control (the $20) with the intent of having that resource provide additional gains to you or someone else (helping a friend through a pinch and perhaps accruing some social capital for yourself)

As simple as that. You choose to put your money on hold, when you have temptations to spend and spend, to achieve better financial goals.

[Saving IS Investing via TheSimpleDollar]

Lend Money To Friends Without Ruining Friendship

Photo: maol

First thing, don’t expect you will get your money back when you lend your money to your friends. What April Dykman, staff writer of GetRichSlowly, wrote is hundred percent right. I have seen a lot of my friends are never getting their money back, or at least pay a third of the full amount – after you pursuing them like a madman.
For all my life, I never lend any money to a friend, I rather say, “No, I have no money” right now than see our relationship crumble and collapse in future.
Furthermore, the money problem will never get solved even after give loan to your friends.

Dykman wrote:

“Unfortunately, my friend continued to have money problems, and eventually she was evicted. Her boyfriend was fired from the job after a few weeks. While I feel for her, that’s the extent of how much I can help her — at least financially. I don’t regret our decision to help out, and though the money is gone, our friendship has remained intact, which was my primary concern when she asked for help.”
As for me, I only lend money only to my family and relatives – the only group of persons that I trust.

[How To Lend Money To Friends via GetRichSlowly]

Stopping The Money From Flowing Out Like Endless Rain

Bringing a new member into the family doubles everything, especially the space and the family expenses. We need a new larger house and the food expense is likely to go up, as well as the diapers expense. But our salary stays the same.

Inflation has slightly increased  this year. The groceries like chicken, fish, and prawn appeared to have a new higher price even though the government has put the ceiling price for each item. If then, I should expect to see a slight increase in our household expenses.

I saw the interest rate crawled up by decimal points. But I’m not in the middle of gaining anything big that I have to make a personal loan, and I’m not planning to take it just to cover our day-to-day expenses. That’s a suicide pill. All we have to do is to reduce our expenses. And here are the seven ways how to reduce my expenses for this year:

1. Cloth Diapers. Investing in cloth diapers will give a break to your expense. But you have bear the big cost initially, then you will see the return in the future. It becomes a new way to show to the people that your baby is fashionable too. More and more mothers accept the cloth diapers over disposable diapers. You can compare to how much cloth diaper and disposable diaper really cost.

2. Breastfeeding. My wife have set a new motivating goal; she wants to breastfeeding our baby until she’s 4 years old. I think it is a good idea and I encourage her intention. She started doing search for the best breastfeeding machine, shoveling the best offer in eBay, and give good opinion about it.

The breastfeeding machine, same as the cloth diapers, is expensive for the first time. But it extends as a valuable asset to you. I find an interesting article about breastfeeding milk versus animal milk.

3. Higher standard of hygiene. Keeping hygiene on a higher standard leads you to a healthier life where your family is far away from disease and infection. From washing your hands clean regularly to keeping your house clean, you can rest assured that your children are harmless from bacteria and germs. This also prevent the cost of seeing doctor every year, which we can see it rising higher than our inflation.

4. Hit the Playground or Park.I always choose shopping mall over playground. It have air-conditioner and I don’t get sweat as much as I do in the park. But the problem is once you enter through the arch of a shopping mall, your money gone in 60 seconds. Instead, I bring my children to the playground or park for playing. the temperature is naturally hotter, but I will get used to it.

5. Playing Wii with family. In 2009, Wii console costs you about RM999 in Malaysia. My main reason for buying Wii console was a gift for my wife. She wanted to do exercise to stay fit but she didn’t want to leave her babies. Going to gym only made her felt lonely and miserable. So I bought her a birthday present so that she could do the exercise inside the house.

On weekends, we rarely do our outing like we used to do. It saves us petrol and the other expense such as highway toll and parking fee, and indirectly we reduce car service expenses. Shopping expense is also reduced since we having a great time playing Wii together.

6. Cook your own food and Bring lunch to office. I’ve been bringing my lunch to office since 2007, and it practically saves you a lot of money. When I got married, my wife also doing the same as I am. On weekend, instead of going out and eat at McDonalds which we were usually did, we cook our own lunch and dinner to save money.

7. Buy your office shirt twice a year.I have counted all my expenses for clothing & accessories, and I found out that I have remarkably bought only two shirts for the last year. One was on the day of my birthday. And one was at Jusco sale. Actually I just have no temptation in buying new office wear regularly. I feel so great when I bought one shirt and used it until it faded out.

Conclusion.

Sometimes I couldn’t watch myself get sunk with the temptation. I bought things that I don’t need and I get disappointed after that. Thank god that I have my partner to remind me to keep our expenses on track. I will keep on stopping the money from flowing out like endless rain.

So people, what are your steps to save money for this year?

Photo Credit:nikepresto7

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